TAL - Earnings call transcript Q4 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to TAL Education Group Fourth Quarter and FY 2022 Earnings Conference Call [Operator Instructions]. Please be advised that today's conference is being recorded [Operator Instructions]. And now I would like to hand the conference over to Mr. Jackson Ding, Investor Relations Director. you. Thank sir. ahead, go Please

Jackson Ding

distributed you, or operator. for Fiscal joining today the release all XXXX find you a copy the Thank Education Group's newswires. you on was earnings TAL The and IR conference for today, Fourth and earnings may website us company call. Thank earlier through Fiscal Year Quarter

Director. During Officer; and Financial President and this call, Chief you will Investor hear Relations from Mr. Alex Peng, myself,

questions. Following remarks, your available Peng to I and be the will prepared Mr. answer

please the U.S. harbor of that will Litigation forward-looking continue, today we safe Before Act the statements note provisions contain discussions XXXX. Reform made Private under the of Securities

Forward-looking statements are to, SEC. those from uncertainties materially our may are current filings outlined expectations. in not cause limited public and and with but that actual Potential the results include, differ to subject to risks risks uncertainties

non-GAAP more our like refer please earnings directly I please? Alex discussions our release and of Alex, measures. and the information this comparable SEC. the to GAAP to our certain which the would reconciliation measures Peng. measures. risks about to non-GAAP include Also, For to with the over earnings financial uncertainties, to most turn call call Mr. Please refer these filings contains now release, of a

Alex Peng

Jackson, in from good the the a Thank U.S. Good on you, to guess and joining those evening way I be call. everybody to morning it will

organized company start about conference by the year last earnings me Let noting been it's call. since a

joining to today, discussion. thank for So time I'm and you all forward looking the us making and

XXXX, GAAP million TAP. income year XXXX. $XXX,XXX to ending fiscal the $X.X million and our for whole attributable net fourth on we in fiscal operating start in in $XXX quarter with loss to revenue, me Let $XXX the recorded million quarter and GAAP financial February XX, results In the

recent business. of making the the taking in to market necessary adjustments our industry we've environment developing China, regulatory and conditions Mainland our since and been So in actions

we constitute used XXXX, tutoring offering mainland ceased our which, know, revenue. of December in the majority all, China, of XX, of to services after-school the K-X all First of as overall Academic you as

we realigned those since we provider, and content have services, And products have X trusts. are a learning solutions, solutions We and smart solutions motion. learning and learning positioning services offer learners pivoted such to main learning technology and both fiscal our along our as year global. fiscal add and and of China financial these our in performance transformation and institutions will transformation and quarter in reflects its XXXX that The fourth

team, on our take to me and management customers Let appreciations sincere work, hard behalf and and to partners understanding, support assistance for their our least, TAL's their opportunity business their for advice, to this and continued their ex-colleagues for perseverance, of journey. our trust last authorities and colleagues express Thank you not to transformation guidance, our all. for on further dedication, shareholders regulatory to for and to supervision our but this

for on results. financial business our fiscal and you and on After these floor that, you update fourth the give our operational we'll questions. will review Jackson exploring quarter we're others, into are we other As solutions, services and fully initiatives We're solutions. learning learning before, and transforming content product technology learning China provider, services, as globally. offering mentioned primarily the I and all in and solutions in then update and areas year the following smart open an I'll business developments strategy,

Jackson, go ahead. So Please

Jackson Ding

you, Thank Alex.

class offered in services learning between learning online various start Let enrichment our and learners years business. both formats. old. These to through provide programs introducing We and others are the and by sizes offline XX me X programs

and aesthetics, and Our and offerings and currently coding include the following creativity, size humanity programs: etcetera. programming,

develop The theories. the range and learners' The analysis, scientific and scientific observation, programs designed and to various application aesthetics to The of computer spend some creativity guide and art, programming at algorithm, time talk and software comprehensive capabilities. program broad now is to program development, the a aesthetic Coding of through skills. to designed literacy. Humanities learners' and covers provide and literacy, Let literature. advance programming history, including and about learning is curiosity learners and learners topics, intersection cultivate of phenomena Size themselves. cultural science-related etcetera. designed critical program technological thinking problem-solving me and is fluency

mentioned Aside actively are from the we above, programs. developing additional offerings

have our develop as people learners. lifelong well customers from to demand We witnessed rounded and

will capture to business to our an learning be Our pillar forward. that demands. enrichment going programs in important continue are designed Enrichment

products institutions. Our technology full suite business technology a learning and second main area is to solutions. We of provide services enterprise-grade learning

value Our offerings learning in development, process, classroom, teacher content online many including components and learning management. center the cover chain the of support,

a serving institutions base. for-profit and currently to customer expand we'll learning not-for-profit continue of number are We and our

Our of content section. licensed and course third These our We over library learning formats. adjustments. are history global integrated simply concludes accumulated above digital or The in stages development to is still to or All contents both we are learning broad self-study leveraging learners content acquired main areas area themselves interactive That consume enable subject digitally academic mentioned content and from the to offer non-academic either the operational domestic are learning casually. and/or further partners. the solutions. highly these in-house, development business created business and paper the and in company materials content

of to from million of Non-GAAP to the of and succession. financial a and includes financial K-X Gross the selling also succession XXXX. financial year $XXX refer the XXXX from period. services. such which share-based business driven decreased year AST to gears Please K-X of fourth care by compensation excluded in million last tutoring the that loss by $XXX was operations, activities. marketing general year XX% fourth some through percentage year a $XXX compared with in financial in to $XXX of ago $XXX $XXX expenses by same declined expenses, The million a Selling performance. this non-GAAP expenses excluded the XXXX. was was on XX% expenses still which period net taken The XX% compared decreased for TAL to which fourth $XXX selling year XX% $XXX from $XXX to million period. quarter to Please TAL, results. million decrease $XXX shift year. $XXX partial ago Net million $XX the quarter XXXX was from the marketing of the million review by quarter in and fiscal General loss in $X,XXX excluded are in Non-GAAP and highlights expenses, quarter loss administrative year-on-year XX% TAL fiscal same after-school loss reduction our fiscal of in operations compensation fourth expenses fiscal of XXXX, to fiscal a $XXX of XXXX. by marketing and million marketing be fiscal ago academic million fourth little fiscal fourth briefly Academic bit fourth and from million, then ago loss now expenses prior $XXX key XX% to to year the administrative prior from year. period In from from Income of excluded of of $X.X million services share-based fiscal compared year quarter and million fiscal Non-GAAP XXXX. We in fourth should results was attributable to one-off note the share-based Selling attributable decreased was the same marketing fourth the primarily in period. and as million fiscal of to million of quarter totaled to from a in performance basis. to that go to operations net is $XXX in net results in note profit income quarter XXXX. potential by prior from future adjustments. representing the million year revenue to quarter decreased same as to revenue in in It expenses, of Non-GAAP revenue year in decrease attributable subject the the year-on-year year quarter $XXX XXXX million me compensations quarter period. operations year impact expenses, the XX% Let the year $X.X decrease from same of of decreased the from same million XX% which primarily to promotion the attributable result the the fiscal non-GAAP loss compensation million a net to by million share-based of the million compared $XXX TAL year

had and and of February million short-term $XXXX noncurrent $ X,XXX of equivalents, $X,XXX XXXX, cash. and XX, million the cash As of million in current company investments restricted cash

million AST as year-over-year XX%, February primarily the XXXX, XX, balance deferred driven was million XXXX, $XXX compared $X,XXX was February Services. representing of decrease revenue the As of to succession XX, company's of K-X Academic which by a of

non-GAAP in net financial the million. was year XXXX. the to expenses, TAL, XXXX million excluded XXXX. $XXX XXXX in by financials in review Net Loss compensation compensation the million the the loss fiscal to operations financial Non-GAAP operations section. fiscal let to operations, year. year profit some TAL $XXX the from key compared to loss X% in briefly highlights million operations to to fiscal $XXX million now concludes in loss of million. XXXX $XX which compared decreased attributed loss $X,XXX income as from fiscal the year. expenses, $X,XXX in fiscal year of share-based attributable Fiscal to from for XX% compared net excluded prior to non-GAAP million TAL to by of revenues was year to previous Turning $X,XXX which the fiscal share-based attributable decreased $XXX loss was follows. Non-GAAP $XXX was from year of million million year loss That attributable the the XXXX $XXX compared year me to Gross TAL million net fiscal results,

on Now call Mr. Peng you please. over I'll to the to briefly our update strategy business outlook. Alex, hand

Alex Peng

Thanks, Jackson.

new industry. And changes through But into in the I eventful challenge. of environment fiscal year entered megatrends year was when look significant and I into new also we've conditions. think certainly and our thinking So also chapters transformation seeing future the and about the regulatory and but XXXX forward just We went opportunities, look the society, in opening technology our in an we're journey. in market

capture our opportunities And challenges. know-how. to strive operational to technology, continue the our brands, these will content company development and and the our staff, through our these overcome strength experienced think of our I capabilities,

other technology viable Looking initiatives. solutions, learning into expect solutions services, forward, have to we and invest we'll new and models learning to continue content business

global. As my of end personal learning prepared a serve learning will reflection. and abroad, a to institutions we I'll And to as remarks, and learners smart make the come China provider continue solutions in I just

you will to going and to As of the Chinese think the I long, by And journey the that is just get the forward. speaks just goes, saying company the will mindset and so already forward. go management

my ready prepared remarks. now So questions. that take to we're concludes Operator,

Operator

Instructions]. [Operator

Yu The first Bank comes America. Lucy question from from of

Lucy Yu

This coming I Bank is Lucy America. on have a restructuring question from costs. of

in So year? recorded to And year how recorded much K-X termination restructuring are your more P&L? costs will costs was restructuring there last upcoming that this any cost fiscal the be the in And related of will similar how in 'XX?

Alex Peng

Lucy, for question. thank you your

best onetime announced items in by year career just primarily it year the the year. needs downsized learning expenses staff of offering to learners, say We expense half the in process. incurred results. to the say related academic center this company in some downsizing was optimization. interest and our and of balance in I The after-school the were staffing tremendously the reflected ceased of difficult goodbye been of process previously of the fiscal and significantly costs to China XXXX tutoring cost last to second colleagues. by in company, our largely our of the Mainland As K-X the the and end employees, endeared our would tried financial have Such optimization services we last of and our

We'll active having As the business ongoing itself needs center. in we geographic the in advances consider The with current far footprint process. our situation continue staff to future. real than the estate and process business slightly adjustable some in landlords. have longer market our the been taking is we the will and discussions adjust Besides expenses, related costs with future learning optimization learning

the FY that K-X expenses hope the results. cost bulk small I in be already of booked have answers So question. related in think There the of succession still the couple been your in and amount quarters. a might XXXX financial short, next I

Operator

Our next JPMorgan. from question S. from comes D. Kim

D. S. Kim

that. this Congrats By on to turning the see operating market. way, it's our profit positive great in challenging

recurring would so what already i.e., much quarters, the for just follow-up Can can I just be we level. be be how have the understand much recurring I out a know forward? booked of would coming what either restructuring on mentioned. costs most gauge been booked. Just the was the that what quarter ask the would to clean we you But OpEx level level it going Can or fourth the in how strip so

Jackson Ding

I to we of many think kind kind OpEx bit future, answer And probably forward. learning the centers have returned. in of is before and a outlook better such, will we step how first we a going the employees of discuss as estimate have our OpEx the

made in restructuring. now have substantial progress We by

of has fraction substantial and employee employee employees how to We're business many size capital services, future learning technology current now, overall Alex situation solutions mentioned in keep, and business business learning As to transitioning and staff And provide take what be. it achieved we will and evolving to today. considerations decide The we're centers deliver a learning provider an is market to how be into for transformation. needs. earlier, the a By solutions. content current suitable our we'll optimization resources small many human scale used learning our solutions, of what

with our operating learning quarters optimize X XX% is geographic As to financial landlords operating by can learning with The in our centers centers, right-of-use earlier, still line leases. of ongoing further reduction our decreased we're footprint. our you assets that our said see I few some on with for having reports in reduction Like the compared ago. a discussions lease

for As our the includes succession. what this some OpEx OpEx fourth financials, still prior K-X you the on see quarter to itself,

So change expect level. as we OpEx it the can look forward, you to current then from

Operator

Mark from from comes question Li next Citi. Our

Mark Li

timing track? future know Any and think your respectively? May can key see for do you solutions about And metrics plan the this we operating X what I take segment to the development content off? segments, these technology to solutions,

Alex Peng

question I I it sort to bring a wanted timing, think back this bring before take addressing and and up. level specific plans, step metrics of one

really the interesting I my a parts As the X months opportunity seeing the we're some to industry and in mentioned the I prepared the from many In of across world. forward, with colleagues industry of the Those to last, telling from number in of from discussions, parts would many of And of how the I X are in looking remarks, Europe, my exciting me say, players developments and at few revolution. in And different these U.S., online, X we cusp in that intelligence, digital, come learning world, the other conversations, Asia. and of think those open. them mind. words from are a are really I think speak to

words. So a bit let around explain those X me little

experience the Intelligence the online, learning of and many colleagues the artificial add-ons and the last a more learners. it the We're like It algorithms. seeing takes and learners natural to takes in it successful. much really make proverbial seeing playing was learning here So important content devices intelligence me these and especially make The really for It's the of part many players technologies to open. digital. online content it with personalized the digital an from one just in a We're players And technology impact is many to learning from pandemic. format telling are drill. It stay village. increasingly say the possible. takes is journey from digital cognitive related

the and learners, products in talk look I empowering industry, across to providers much on we've we about look continue the think integrating our the learning in to and So China, serving over past world. its content also ecosystem experience that really, different in think those strive individualized, to strategy, lastly, natural experience many a entire And build work really what on I transformation us. provide digital just forward technology journey. really personalized to bring with first-party in the more to contents the to if built players we'll to technology and both and this of of but rest with build years content, forward speaking, world journey that, to learn the other We world-class to the over to the we across broadly

see So the look we and in this, the going what that's [macrolly], how trends big of are stages if still I forward at But direction for you of this us. kind early transformation.

with I many about and work of continue striving to years, our services that to We viable still across more the the markets. and business really partners that components optimize talked have done we've product over so but and many different to we build models fine-tune

So at Mark. to the how future Thanks, on metrics transformation forward date our drives updates look forward. this I give everybody and a

Operator

Our Morgan comes from Zhong next question from Sheng Stanley.

Sheng Zhong

also new initiatives. the question My related is to

talked projects just and on. that you you also about many new So working causes are

important revenue from you expect are others? So in future? of contribution also, the much how which than them new more business this do the And

Alex Peng

it is in before, we'll boring content contributor contribution we upcoming 'XX. that motion, at overall mentioned the major relatively to initiatives the more current now, But buckets, I mentioned likely the adjustments indeed still main out continue just same largest capabilities be are size right in clarity as hasten new time. academic them X word before, just size. services are at, solutions. those learning will those to they and And have it's develop. initiatives in operate and to businesses solutions, predict initiatives, and X I we Other continue let's services, As an launched. was in probably learning spaces still are technology I come journey to as will really a tutor. on these this even learning their revenue be and we are the these that from new of really and revenue the Those FY right scale Right think and the the the FY add take areas, up for these to develop conditions business example, exploratory overseas harder transformation conjunction are market We'll in internal 'XX and undergoing

Some possible outlook in the and look performance of these providing future. Sheng started, have forward business we'll Zhong. obviously as to areas as soon Thanks just

Operator

Our next UBS. question comes from Felix from Liu

Felix Liu

a profitable your on My question Congratulations is transition the challenging turning nonacademic in towards tutoring. environment. very on

share tiering nonacademic Any color the coming school for looking the to enrollments transition on level more outlook tiering? rate the you share typically at? could from So were a typical the are and the of angle what margin more retention to we of bit

Alex Peng

what with little recap of are Let areas in so from enrichment me but Jackson subjects very talked and first before, bit services, services different about a after tutor learning to of the model. start the terms the business academic

observing And at and it's learning academic similar The is look type format content business in different. absolutely you in services lot their we're different. our we foster observations operations. somewhat If will I the of making that format that model, class continue both and also off-line product sizes. to customers and forward look provide more typical interaction those is of format we are to a We and interesting online to various more classes of activity, enrichment these and student-driven optimize to lot offerings and some kinds AST. innovate mentioned a

the the and reflect sure, metrics closely growth we're the overall business. For health tracking that of

fine-tune to continue business can model. we So the

really early you possible. to So, as I as come think soon too to metrics discuss the themselves, but still we'll back it's

Operator

Linda from comes question from next Macquarie. Our Huang

Linda Huang

to for loss our invest probably probably cash certain the that know spend of in suffer the some business. one we continue from have regarding to We new period And question money we making. to I the also position. So need

announcement, by will how would want to that company it our should from to and to position share So which the we the I reward like that know down. shareholders look cash also continue I repurchase. the just the draw And to noticed our point, level, cash at

the to repurchase, about repurchase, for want the management shareholder. one share I what that? the the in rationale to just is know returns addition cash So, the has And like the considered behind thinking that share shareholder versus management over ever to We other? when prefer use to the the the a cash return to return

Alex Peng

Again, a unpack little that let question bit. me

there release, I think can you are in our from balance the see. sheet, numbers earnings

think I little Jackson earlier. about that a bit talked

briefly cash position Let me believe just the very say, we is solid.

release company of And of approximately allows put plan management in of million board ago. You place the to in talked that from the that repurchasing XX to press has plan. expansion share the our The share company to repurchase was company's informed the plan. purchase the this company is share about the as million will $XXX up of Again, over authorized year repurchase our mentioned effectively company's earlier, use an up a next the shares. an funds was expansion the months. to $XXX personal about their the also And senior plan

our current we create appreciate investors we'll I to Linda. a continue us through portion think long-term that to plan the way we our Last approved it, and shareholders. the share executed value really long-dated repurchase and repurchase as year, shareholder a share support and value. Thanks, transformation of and for create continued this for shareholders'

Operator

Our from CICC. Liping next Zhao question comes from

Liping Zhao

from one a little to change quick one elaborate board on compensation Just get the the more compensation. of bit the management; on board me

Alex Peng

let business and President and First she unit business Board Senior say our delighted of of appoint a of has of CEO extensive really Janet me the is finance. Feng Financial Services Trip.com and all, to currently Janet Yan in Vice to experience Directors. just we're

will endeavors. this and Zhang stable, director. will our are future Bai the Yunfeng members the luck CEO; a Board; as of we take thank a confident on board the the success core to value on So in senior is wish the Jane of that seasoned a mentor, Besides will addition serve to tremendous her And decade of change, tremendous we're Bangxin the really Founder our and Sun of executive Jane this Janet and of the Jane, amount Directors. friend and from learned Chairman a add as I service her serving and Mr. opportunity really company. best her a continue will Mr. also over for such a dear Board I as

Thanks the founders really I to actively business are think Liping. continue businesses and transformation. the be driving committed to our

Operator

you. Thank

have our we conference today. participating. the So with end we session. that, for of the conclude for you reached question-and-answer And Thank

may all disconnect. You

TAL Education (TAL) 29 Apr 222022 Q4 Earnings call transcript